Rob Allen
Senior Policy and Research Manager, Policy Connect
Lord Bilimoria of Chelsea CBE, DL
Cross Bench Peer, Chair of the Manufacturing Commission, Founder and Chair of Cobra Beer, Chancellor of the University of Birmingham
Productivity across all parts of the economy is being held back by labour shortages. In the manufacturing sector, this ‘skills gap’ is estimated to cost between £7.7 billion and £8.3 billion annually in lost output.
The UK’s departure from the EU and the Covid-19 pandemic have both exacerbated the skills challenge, further reducing the pool of labour from which the manufacturing sector can draw.
Legislative reform to address local skills needs
However, the skills gap cannot be blamed entirely on these events. The post-16 education system in England is a complex mix of market-based and government-supported provision, which has been subject to frequent policy change in recent decades. This has resulted in a healthy scepticism from businesses looking to upskill their workforces.
Recent reform to post-16 technical education through the Skills for Jobs White Paper and subsequent Skills and Post-16 Education Act is therefore welcome. In particular, the Act sets out the requirement for education providers to work with employers on local skills improvement plans (LSIPs), which will allow decisions to be devolved to local areas and better address local skills needs.
The post-16 education system in England is a
complex mix of market-based and
government-supported provision.
Cross-party support for upskilling
Possibly more important than the contents of the Act is the fact that it received cross-party support. This makes us hopeful that these reforms to the further education system will be taken up and built on by the next government and beyond — whichever party wins the forthcoming general election. Indeed, the Labour Party has already committed to retaining several key policies, including LSIPs, should it come to power.
Delivering a skills system fit for the future
During our recent inquiry by the Manufacturing Commission, businesses specified that consistency in government decision-making was of vital importance to them — allowing them to invest for the long term, knowing that rules will not be changed and ensuring a level playing field for all. It’s therefore incumbent upon policymakers — of whichever political affiliation — to deliver this consistency on the skills agenda.
Providing this cross-party approach can be achieved by legislators; we see no reason why England’s future skills system cannot match that of any country in the world. After all, a similar turnaround has been achieved in primary school level literacy, where England now ranks fourth (for 9 and 10-year-olds), after decades of stagnation. It’s therefore vital that the Government continues to prioritise further education and works with both businesses and education providers to deliver the skills that the manufacturing sector needs.
